Rangers: Dave King statement in full

“BECAUSE of my ongoing interest in the future direction of the club, I have deliberately avoided immersing myself in the day-to-day “noise level” that is being played out in the media.

By doing this I had hoped to serve as a bridge between non-aligned stakeholders and the club, as well as seeking a way forward that could accommodate all interests. I no longer believe that I can achieve this with the board that is presently in place. I consequently wish to update the fans on my current position.

“Late last year I travelled to Scotland in an attempt to find a way forward that would accommodate all parties and ensure sound corporate governance and sound financial planning for the club. Unfortunately, my efforts were in vain. During this period I made it clear to the board that I am a potential source of funding by way of a new capital injection. My prime condition is that any funds introduced by me would go into the club for the benefit of the team and the dilapidating infrastructure.

“For the avoidance of doubt, I appreciate that the Rangers board has no obligation to engage with me or to agree with my vision for the future of Rangers. My assessment is that the business is not commercially sustainable in the short term and hence requires a level of soft investment. The board is focusing on right-sizing the business ie. cutting costs to match the income. It is correct that any club must, over the long term, operate within its means but in the short term Rangers needs a significant once-off financial boost that cannot be met from the current revenue stream. Without this we will not get back to where we should be. If we cut our costs to suit our present income we will remain a small club and Celtic will shoot through 10 in a row – and beyond – while we slug it out for the minor places. That is not the Rangers that I grew up with and not the Rangers that we should be passing down to our children and grandchildren.

“Such a soft investment will only come from a fan-based group that regard their return as winning trophies in the top flight. I have been such an investor and want to be so again. I would like to lead a fan-based initiative to acquire an influential shareholding in the club.

“I hope that the board will belatedly recognise the importance of communicating with fans on the true state of the club’s finances. Financial transparency should now be a non-negotiable requirement of the fans prior to investing in season tickets. It is an easy deflection for the board to suggest that it has had insufficient time or that it is restricted by AIM regulations.

“That is simply not true. Legitimate concerns about the club’s financial position have been voiced for a long time. It should have been the board’s number one priority to provide the comfort that the fans need – if it is able to do so. Craig Whyte employed exactly the same reasons for avoiding disclosure of the true financial state of the club during his ill-fated period of ownership.

“The board has previously dealt with queries around the club’s finances by giving categoric assurances that there was sufficient funding until the end of the season. We now know that these assurances were untrue and that emergency financing has been put in place on terms that are not commercial and that indicate the desperate financial position that the club is in.

“This lack of transparency on the present and projected funding position is extremely worrying. The Craig Whyte purchase would never have happened if the true source of “his” funds had been known. Similarly, the fans would not have purchased season tickets at that time if they had known that their funds were going out of the club. The fans lost their cash and almost lost their club. So now, at this critical time, I remind fellow supporters of the old adage – fool me once shame on you, fool me twice shame on me.

“The fans have no proper insight into the owners of the club and who represents which shareholders on the board. The board has strenuously resisted any attempt by the fans to find out who key shareholders are. What is known is that the current board members have a very minor stake in the club. Rangers has also developed an extremely un-Rangers like culture of “turning on its own”. It is not in Rangers culture to have spin-doctors that feed information to the media in an attempt to damage our own players, management, potential investors, and supporters. Much of what has been fed to the media is clearly untrue or exaggerated.

“Ultimately, it is in the hands of the existing shareholders (through the board) to decide to issue new shares to investors. There is a clear reluctance to do this at the present time and the reasons for this can only be speculated upon. Undoubtedly, the club requires a significant injection of new equity from existing or new shareholders but this will take some time to put in place.

“A proper financial evaluation will have to be undertaken and all the necessary AIM requirements etc. complied with. Clearly, by not having acted sooner the board is making it clear that it has decided to rely on the fans’ cash once again.

“The big question is – ‘What can fans do to protect themselves but still assist the team and management?’ Fans must remember that the purchase of a season ticket is essentially an individual loan from the fan to the company until such time as all games are played. No banker would lend money to a company without knowing its true financial position. Unless the board departs from its present stance of opacity the fans will be asked to lend money to the company with no security and with no comfort that the loan advance is not going into a financial black hole. It must be stressed that the board was happy to give security to Laxey Partners for the recent facility as well as a massive return on this short-term loan. It seems wrong that, if the board gets its way, these new loans will be repaid from interest free and unsecured loans provided by long suffering fans.

“If the board does not provide disclosure to the fans then it is time to draw a line in the sand. I propose that the fans buy the season tickets only on one of the two following bases:

1. The fans pay the season ticket money into a trust and the funds are released to the club on a “pay-as-they-play” basis.

2. The fans pay the season ticket money into a trust and the funds are released in full to the club but against security of the club property until such time as all games are played. In that way the fans will have some protection from a future event of failure if the board cannot bridge the funding gap that clearly exists.

Additionally, the fans should insist on a board appointee prior to renewing their season tickets, to look after their interests.

I also suggest that the following questions be put to the board on condition that satisfactory answers must be given prior to fans agreeing to make cash from season ticket sales available to the club.

1. Will the board provide legally binding assurances that the club is a going concern and has sufficient funds and/or facilities in place for the 2014/2015 season?

2. Will the board undertake that none of the proceeds from season ticket sales will be used to settle any financial obligation that arose prior to receipt of the season ticket monies by the club?

3. Will the board confirm that the club assets continue to be unencumbered?

4. Will the board explain its previous statements that the club had sufficient cash resources to last until the end of the season?

“I previously invested £20 million in the club and lost it all. Like all Rangers fans I continue to loyally support the team and the manager. I am willing to provide funding again but I do not believe that Rangers should be under the control of one owner/benefactor. We have already seen the damage that has been caused at Rangers (and many other clubs) when the club becomes a hostage to the fluctuating whims and wealth of a single owner. I see my role as being the lead investor of a like- minded consortium that will invest in the club, along with the supporters, without the “short-sightedness” of an immediate return on investment. An immediate return on investment will guarantee a non-immediate return of the team to the top flight.

“The fact that it believes it can proceed as it is doing without financial transparency makes two major statements about the board’s thinking. First, they have correctly understood the fierce and unbending loyalty that Rangers fans display towards the club and the team at a time of common difficulty.

“Secondly, they have seriously misunderstood this loyalty as being something they can take for granted and offer nothing in return. We shouldn’t allow that to continue. At this critical juncture, the fans control the funding that the board is relying on. How we proceed will determine our club’s future.”